Economics of Water Electrolysis

A detailed cost analysis, performed in 2004,29 of the domestic produc­tion of hydrogen using a photovoltaic-electrolyzer system showed that, for a 1 kWp photovoltaic system with fixed modules, depending on the



annual solar radiation on a horizontal surface HT, the cost of hydrogen varies from 3.5 to 38 $ kg-1 with a corresponding energy cost from 26 to 268 $GJ-1. Specifically, the hydrogen energy costs CHM (in $kg-1 H2) and CHE (in $ GJ-1 H2) are correlated empirically with the price of the PV plant and of the electrolyzer, expressed in $ per Wp, (Ppv and Pel, respectively) according to the following equations:








In 2004, the price of energy for gasoline engine powered vehicles was about (0.5 $L-1)/(0.73kgL-1 x 0.046 GJkg-1)E 15 $ GJ-1. Hence, even considering that a fuel cell powered vehicle is more efficient than a gasoline engine powered vehicle, Bilgen concluded that, for solar hydrogen:

The lower end price of about 25 $/GJ may just be competitive in heavily subsidized situations. Otherwise it is clear that as expected, with the present photovoltaic and electrolyzer price structure, domestic produced hydrogen will not be competitive with the fossil fuel derived gasoline or similar fuels.

Seven years later, however, the price of gasoline in Northern America in 2010 was 0.76 $L-1,30 i. e. 22.63 $GJ-1, whereas the pho­tovoltaic-electrolyzer system price is about 10 times lower than in 2004.

Using the Hydrogen Analysis (H2A)31 tool, a standard methodology developed by the US Department of Energy (DOE) to estimate hydro­gen production costs, in 2006, scientists at the US National Renewable Energy Laboratory reached the conclusion that in order to meet the DOE’s cost target for hydrogen at 2.00-3.00 $ kg-1, electrolyzers with 2006 efficiencies would need to have access to electricity prices lower than 0.045-0.055$ kWh-1 (Figure 2.16).32

According to the state of the art technology of 2006 electrolyzers, ideal systems would need to have access to electricity prices lower than $0.075 kWh-1, representing the highest possible electricity price in 2006 that low-temperature electrolyzers would be able to use to produce hydrogen at $3.00kg-1.


Chapter 2


Figure 2.16 Cost of hydrogen versus electricity without equipment costs. (Reproduced from Ref. 32, with kind permission.)

Updated: August 15, 2015 — 2:06 pm